No more telco contracts & roaming charges with Gemalto eSIM? We are almost there...

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By Ong Kai Kiat | Apr 11, 2017

eSIMs are soldered on the device internally and they are neutral to telco companies

eSim opens up the possibility of auto-connection when consumers travel around the world

BEING able to stay connected on the go has been the cornerstone of the mobile revolution especially with the first successful smartphone launch by Steve Jobs in 2007.

The seeds of connectivity were planted with the invention of Subscriber Identity Module, commonly referred to as SIM cards today, in the 1980s.

However, such SIM cards have one obvious flaw. Every SIM card is manufactured for a particular telecommunication (telco) company in each country individually.

The rise of eSim – Telco-neutral chips

Today, consumers have to discard their old SIM cards and sign on for a new one every time they change a telco provider. This obliges them to go down to a local store and pay for a new SIM card which is a waste of time and money in this digital age.

This might work for relatively large devices such as smartphones which has a physical slot for SIM cards but not smaller devices such as smart watches.

Moving ahead, the next revolution for SIM cards would be embedded SIM or eSIM in short. As its name suggest, eSIMs are soldered on the device internally and they are neutral to telco companies.

In other words, consumers can switch their telcos without changing their eSIM. In other words, this removes a physical barrier for flexibility of telco contracts in terms of the duration and cost of service.

Given the entry of the fourth telco in Singapore, this can bring a sea change in the dynamics of consumer plans as we migrate to eSIM in the near future.

One of the leading players of eSIM would be Gemalto which was founded back in February 1979 with the invention of phone chips by Roland Moreno. This established company has been making waves with its eSIM since the beginning of the year.

Microsoft and Samsung collaboration

Gemalto had teamed up with Microsoft to embed eSIM into Windows 10 devices for seamless connectivity. This solution comes with a subscription management software which allows Microsoft devices such as the upcoming Microsoft Surface Pro 5 to be manufactured with eSIM and sold around the world without being tied to any telcos. Users can choose their telcos which can provision their services remotely.

In a phone interview with Gemalto’s Head of M2M solutions for South Asia and Japan, Manoj Kumar Rai (pic, above), he explained that this would be game changer which would allow laptops to connect to Internet on the move without tethering to an existing connection. Gemalto is in advanced collaboration with Microsoft and the tentative release date would be in the second half of 2017.

Besides operating systems, Gemalto had brought its eSIM product to Samsung’s smart watch, specifically to the Gear S3 in January 2017. Gear S3 can now tap into celluar networks and can be used on the go. Besides Samsung, Gemalto had inserted their eSIM into Limmex Smart watches for the European market.

No more roaming charges with bridge alliance

This flexibility of telco usage can also be applied internationally through the Bridge Alliance. The Bridge Alliance is a consortium of 34 major telco companies in 34 countries which is headquartered in Singapore. Singtel is the member in Singapore, Maxis is its Malaysian counterpart and Softbank is its Japanese counterpart and so on.

According to Gemalto, eSim opens up the possibility of auto-connection when consumers travel around the world. For instance, a Singtel user who is traveling from Singapore to Malaysia would see its connection being switched from Singtel to Maxis network. He can enjoy seamless connectivity and pay local rates for calls and data network. This is a work in progress as the Bridge Alliance members would have to work out their own internal agreements.

Telco paywall

Telcos are currently planning on how to position themselves with the rise of the eSIM which opens up new opportunities and threats. On one hand, there are new devices which would require more connections but the flexibility of eSIM would also post a threat to the duration of its future contracts.

At the end of the day, the telcos control access to celluar networks and they have to decide the terms on which they would allow access to their services. How they would do so is likely to be played out in the next couple of years as eSIMs become more prevalent. eSim heralds the beginning of the end of costly roaming charges and long-term fixed contracts for consumers.

Industrial applications such as smart cities and autonomous driving have new capabilities with the on demand connection but that is a story for another day.

Ong Kai Kiat is a professional freelance writer who enjoys the process of discovering and collating new trends and insights for an article. He adds value to society through his articles especially those related to finance and technology. He is reachable at [email protected]